Valdemar Portney v. Ciba Vision Corporation

NOTE: This order is nonprecedential.

# United States Court of Appeals for the Federal Circuit

VALDEMAR PORTNEY,
Plaintiff-Petitioner,
V.
CIBA VISION CORPORATION,
Defendant-Respondent.

Miscellaneous Docket No. 939

On Petition for Permission to Appeal pursuant to 28
U.S.C. § 1292(b) from the United States District Court for
the Central District of California in case no. 07-CV-0854,
Judge Andrew J. Guilford.

ON PETITION FOR PERMISSION TO APPEAL

Before LINN, DYK, and PROST, Circuit Judges.
PROST, Circuit Judge.

ORDER

Valdemar Portney petitions for permission to appeal
orders certified by the United States District Court for the
Central District of California under 28 U.S.C. § 1292(b)
and moves to transfer the petition to the United States

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Court of Appeals for the Ninth Circuit. CIBA Vision
Corporation (CIBA) opposes. Portney replies.

## I. Background

This petition for permission to appeal an interlocutory
order stems from a breach of contract suit arising out of a
patent and proprietary information sublicense agreement.
Portney owns several patents (both foreign and domestic)
and proprietary information, relating to multifocal contact
lenses. Under the Agreement, CIBA received the right to
sublicense devices employing Portney's proprietary
information and patents in consideration for royalties.

The royalty rate that Portney is to receive under the
Agreement is dependent upon what intellectual property
CIBA's sold devices employ. For devices sold by CIBA
covering a domestic patent, Portney is to receive a 6%
royalty rate; a 3% royalty rate if a device sold is covered
by a foreign patent; a 4% royalty rate if a device sold
employs proprietary information and sold in the United
States; and a 2% royalty rate if a device employs the
proprietary information and is sold outside the United
States.

Portney brought this suit in federal district court,
asserting diversity jurisdiction, alleging that CIBA had
breached the sublicense agreement. Portney sought relief
in the form of damages and a full accounting of all moneys
owed. There was no patent infringement claim asserted
in Portney's complaint as amended. However, a
significant aspect of the dispute is whether CIBA owes
additional royalties because its devices fall within the
boundaries of Portney's patents thereby. requiring a
higher royalty rate payment.

The district court held a claim construction hearing to
determine the boundaries of Portney's patent claims as
the initial step in figuring our what, if any, devices of
CIBA sold fall within the 6% royalty rate for domestic

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patents and 3% royalty for foreign patents. After the
hearing, the court informed the parties that it had sided
with the more narrow construction of the patents offered
by CIBA. On December 23, 2009, the court issued its
final claim construction order and on February 17, 2010,
the court certified the claim construction order for
permissive appeal pursuant to § 1292(b).

In the order certifying the petition, the district court
noted the controlling question of law was the construction
of several patent claim terms. Portney sought
interlocutory appeal in the United States Court of
Appeals for the Ninth Circuit. CIBA asserted that this
court, not the Ninth Circuit, had proper jurisdiction over
the petition. CIBA asserted that the case falls within this
court's appellate jurisdiction because the determination
whether additional royalties are owed under the
agreement necessarily depends on whether CIBA's
devices fall within the claims of Portney's patents. The
Ninth Circuit transferred the petition to this court.

## II. Jurisdiction

Portney moves to transfer the petition back to the
Ninth Circuit contending that it is the proper forum for
resolution. He argues that his complaint as amended
raises only state law breach of contract and fraud issues
and neither includes a patent claim nor necessarily turns
on a substantial question of patent law. CIBA opposes
transfer, again arguing that this court has proper
jurisdiction because of the need to resolve whether its
devices fall within the scope of Portney's patents.

We agree with CIBA that this court has jurisdiction
over this petition. Pursuant to 28 U.S.C. § 1292(c)(1), this
court has exclusive jurisdiction over a certified petition for
permission to appeal under 28 U.S.C. § 1292(b) of "an
appeal from an interlocutory order or decree ... in any
case over which the court would have jurisdiction of an

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appeal under [28 U.S.C. § 1295]." Section 1295(a)(1)
provides that this court has jurisdiction over an appeal
from a final decision of a district court "if the jurisdiction
of that court was based, in whole or in part, on section
1338" of title 28. Section 1338, in turn, gives district
courts original jurisdiction of "any civil action arising
under any Act of Congress relating to patents." 28 U.S.C.
§ 1338(a).

In Christianson v. Colt Industries Operating Corp.,
486 U.S. 800 (1988), the Supreme Court addressed the
meaning of the term "arising under" in the context of
section 1338. The court stated that § 1338 jurisdiction
extends only to those cases in which a well-pleaded
complaint establishes either (1) that federal patent law
creates the cause of action or (2) that the plaintiff's right
to relief necessarily depends on resolution of a substantial
question of federal patent law, in that patent law is a
necessary element of one of those well-pleaded claims. Id.
at 809.

The Court in Christianson further held that the "law
of the case" doctrine applies when a court of appeals
transfers a case based on its determination that another
court of appeals has jurisdiction. The Court explained
that "as a rule[,] courts should be loathe [to revisit
decisions of a coordinate court] in the absence of
extraordinary circumstances such as where the initial
decision was 'clearly erroneous and would work a
manifest injustice." Id. at 817.

Under this exacting standard, Portney cannot meet
his burden of demonstrating that this court should
retransfer. Although it is clear that Portney's complaint
does not raise a patent claim, CIBA's argument that the
second prong of the Christianson test, i.e., that at least
one claim for relief necessarily turns on a substantial
question of patent law, is sound.

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As CIBA points out, resolution of a proper accounting
and damages will necessarily depend on Portney
demonstrating that certain CIBA products require a
higher royalty rate than has been paid because the
products fall within the claims of the patent. In U.S.
Valves, Inc. v. Dray, 212 F.3d 1372 (Fed. Cir. 2000), we
retained jurisdiction over a complaint seeking injunctive
relief against a patentee accused of breaching its grant of
an exclusive right to sell and manufacturer products
under the patent. We explained that jurisdiction in this
court was proper because to demonstrate the right to
injunctive relief, the plaintiff would need to establish that
the defendant's products infringed, i.e., fell within the
scope of the patents. Id. at 368. The analysis in U.S.
Valves applies with similar force here.

### III. Disposition of the § 1292(b) Petition

As noted above, the controlling question of law
certified by the district court was the construction of
various disputed claim terms in Portney's patents.

When creating the authority to seek appellate review
pursuant to § 1292(b), Congress made clear that it was
not establishing an accessible tool for parties to avoid
waiting for final judgment to seek ordinary error-
correction. See Note, Interlocutory Appeals in the Federal
Courts Under 28 U.S.C. § 1292(b), 88 HARV. L. REV. 607,
631 (1975) ("The statutory history of the Act plainly
shows that . . . supervision . . . [is not] a proper
justification for a section 1292(b) appeal.").

This court has generally refrained from granting §
1292(b) petitions to resolve claim construction disputes,
instead, leaving such matters to be determined after entry
of final judgment. This court's decision in Regents of
Univ., Cal. v. Dako North America, 477 F.3d 1335 (Fed.
Cir. 2007) marks the only occasion in which this court
granted a § 1292(b) petition to review the merits of a

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claim construction order. We made clear in Regents
however, that the decision to grant that petition was
based solely on the peculiar circumstances of that case in
which the same claim construction order was already
before the court in an appeal of an order denying an
injunction. Id. at 1336.

Ultimately, this court must exercise its own discretion
in deciding whether it will grant permission to appeal
interlocutory orders certified by a trial court. See In re
Convertible Rowing Exerciser Patent Litigation, 903 F.2d
822 (Fed. Cir. 1990); 28 U.S.C. § 1292(c)(1). Here, we see
no reason to depart from our general practice of waiting
until final judgment has issued to resolve ordinary claim
construction issues. Thus, granting the petition in these
circumstances is not warranted.

Accordingly,

IT IS ORDERED THAT:

(1) The motion to transfer is denied.

(2) The petition for permission to appeal is denied.

FOR THE COURT

OCT 2 8 2010

Date

/s/ Jan Horbaly
Jan Horbaly
Clerk

cc: Howard N. Wisnia, Esq.
Patrick J. Kelleher, Esq.
$19

FILED
U.S. COURT OF APPEALS FOR
THE FEDERAL CIRCUIT
OCT 2 8 2010

JAN HORBALY
CLERK